Dynamically Populating Gravity Forms Using Checkbox Fields

I'm setting up a series of forms, that I'd like to work like this:

1. User lands on form #1 and selects from a list of states in a checkbox list.
2. User clicks submit on form #1 and is redirect to form #2, where a product for each state the user has selected is displayed. (Example: On form #1, user selects Alabama and Alaska. Then on form #2, one dynamic product is created for Alabama and another dynamic product is created for Alaska.
3. User fills in their contact information for PayPal, and using the Gravity Forms PayPal AddOn, is redirected to PayPal to purchase the two state products.

So far, I have form #1 working and it dynamically passes "state={Select a State or States Below:3}" as a query string to form #2. Form #2 displays field name "state" as "Alabama, Alaska" but as a single product, not two products. When you hit submit from form #2, it redirects to PayPal but only shows a single product, "Alabama,Alaska".

You can see the form online here:
http://attorney.us/website-sign-up/

*Please note, only the State Domain option is currently working. However, you may also get an idea on where I'm headed with the other options.

How can I make this work?

The first part of my form is all ready to go now. I have several conditionally based multi select boxes. Each allows a user to select one or more option. Those options can be passed to a second form but I'm struggling on how to finish the functionality of this.

Thanks for any help you can give me on this!

If I setup the "State Domain" as a product and then set the different states as options, do I need to pass 50 field data options to the second form?

I've updated the State, City, and Practice Area options on the form and I'm trying to the second form working again, per your recommendation.

Okie dokie. Here is a snippet that will populate an option field with only values that were passed via the query string.

http://pastie.org/3887481

For example, passing this:

http://localhost/?gf_page=preview&id=150&selected_options=Test 1,Test 2,Test 3,Test 4,Test 5

Will give you this: http://grab.by/dxmk

And passing this:

http://localhost/?gf_page=preview&id=150&selected_options=Idaho,Mexico

Will give you this: http://grab.by/dxmo

A few notes:

1. You can paste this snippet in your theme's functions.php file.
2. Be sure to update the config options for this snippet as specified via the inline comments.
3. This method only works where all options are the same value. It is feasible to pass the actually price of the option in query string as well and then split up the label/price and define it dynamically; however, it'd be a bit more work.